Correlation Between Bank Capital and Paninvest Tbk
Can any of the company-specific risk be diversified away by investing in both Bank Capital and Paninvest Tbk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Capital and Paninvest Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Capital Indonesia and Paninvest Tbk, you can compare the effects of market volatilities on Bank Capital and Paninvest Tbk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Capital with a short position of Paninvest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Capital and Paninvest Tbk.
Diversification Opportunities for Bank Capital and Paninvest Tbk
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Paninvest is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank Capital Indonesia and Paninvest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paninvest Tbk and Bank Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Capital Indonesia are associated (or correlated) with Paninvest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paninvest Tbk has no effect on the direction of Bank Capital i.e., Bank Capital and Paninvest Tbk go up and down completely randomly.
Pair Corralation between Bank Capital and Paninvest Tbk
Assuming the 90 days trading horizon Bank Capital is expected to generate 14.18 times less return on investment than Paninvest Tbk. But when comparing it to its historical volatility, Bank Capital Indonesia is 2.25 times less risky than Paninvest Tbk. It trades about 0.02 of its potential returns per unit of risk. Paninvest Tbk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 94,000 in Paninvest Tbk on September 4, 2024 and sell it today you would earn a total of 16,000 from holding Paninvest Tbk or generate 17.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Bank Capital Indonesia vs. Paninvest Tbk
Performance |
| Timeline |
| Bank Capital Indonesia |
| Paninvest Tbk |
Bank Capital and Paninvest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Capital and Paninvest Tbk
The main advantage of trading using opposite Bank Capital and Paninvest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Capital position performs unexpectedly, Paninvest Tbk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Paninvest Tbk will offset losses from the drop in Paninvest Tbk's long position.| Bank Capital vs. Paninvest Tbk | Bank Capital vs. Mitra Pinasthika Mustika | Bank Capital vs. Jakarta Int Hotels | Bank Capital vs. Asuransi Harta Aman |
| Paninvest Tbk vs. Panin Financial Tbk | Paninvest Tbk vs. Bank Pan Indonesia | Paninvest Tbk vs. Panin Sekuritas Tbk | Paninvest Tbk vs. Clipan Finance Indonesia |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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